MILLIONS of households are facing rocketing gas and electricity bills from today as the energy price cap is hiked.
The price cap has risen to £1,971 but the actual amount you pay could be more or less than this amount.
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Bills are rising due to soaring wholesale gas prices, and £693 a year is being added to the average bill.
That means the price cap has risen 54% from £1,277 to £1,971.
But your actual bill is dependant on many different factors, including how much energy you use and where you live.
We explain how today’s changes will affect your energy bills.
What is the energy price cap?
The price cap limits how much energy suppliers can charge for their standard variable tariffs.
The cap is reviewed twice a year – it has gone up today (April 1) and is set to increase again in October.
It isn’t a cap on how much you’ll pay in total, instead it limits how much energy companies can charge per unit of energy and for the standing charge.
The amount you pay for energy is split between the cost of the gas and electricity use, and the standing charge.
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The average rate for electricity has jumped from 21p per kWh to 28p, and the standing charge is up from 25p to 45p.
Meanwhile, gas prices have jumped to 7p from 4p, and the standing charge is up from 26p a day to 27p.
The standing charge is a fixed fee which doesn’t change depending on how much energy you use.
It is set by suppliers to cover the cost of taking on customers from failed firms and other costs such as maintenance.
The £1,971 figure is what someone with average energy usage would pay.
For a prepayment meter customer, the increase is £708 from £1,309 to £2,017.
The actual amount you’ll be billed depends on how much energy you use, where you live, your energy firm and how you pay.
For example, paying by direct debit is usually cheaper, while prepayment meters are more expensive.
Who is affected by the energy price cap rise?
The price cap change affects households on a standard variable tariff.
You’re likely to be on one of these tariffs if you’ve never switched, if your supplier has gone bust or your fixed deal has come to an end.
As more than 30 energy firms have collapsed since the beginning of last year, millions more customers are currently on standard variable tariffs.
If you’re on a fixed deal your payments won’t change for now.
You should check when your contract ends, though, so you don’t get a nasty surprise when you’re switched to the standard variable tariff.
How much more will I pay?
There are a number of factors that will influence the amount you pay, even if you’re protected by the price cap.
The biggest one is how much energy you use – the more you use, the higher your bill will be.
Another is where you live as standing charges vary cross the country and by supplier.
That’s because the price you pay will reflect how much it costs to transport energy to where you live.
For example, according to data from energy regulator Ofgem, households in North Wales and Merseyside are facing the biggest increase.
The average standing charge will rise 102%, up 23p to 45p a day, the Ofgem figures show.
To find out your actual rates per unit and standing charge, you should contact your supplier.
How can I get help with my energy bills?
If you’re struggling with your energy bills, there is help available.
Your first step should be to contact your energy supplier.
They may be able to change your payment plan or check if you’re eligible for their hardship fund.
For example, British Gas and Octopus have both set up funds to help customers who are struggling with their bills.
British Gas announced yesterday that it has added an extra £2million to the pot of cash set aside to help customers.
You should also check that you’re getting all the benefits you’re entitled to.
Use an online benefits calculator to make sure you’re not missing out on any extra cash.
Similarly, you can search for grants that can help you pay for gas and electricity bills.
The government recently announced an extension to the Household Support Fund to help families with the rising cost of living.
Contact your local council to find out what support is available in your area.
Finally, one of the best ways of saving money is to make your home more energy efficient.
Check whether you can reduce your energy use with a simple trick such as putting foil behind your radiator.
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